working with underwriting to define and sell the insurable risk. maureen veterano
DESCRIPTION
Here are the slides from my presentation at the Patent Insurance InstituteTRANSCRIPT
WORKING WITH UNDERWRITING TO DEFINE THE INSURABLE AND SELLABLE RISK
PRESENTED BY: MAUREEN VETERANO & ROBIN FLETCHER
Celebrating 20 Years as the Industry Leader in
Intellectual Property Insurance
Patent Insurance Institute Pi2
2010
Brokers and Underwriters
Flow of Information
Insured
IPISCBroker
Flow of Information
Insured
IPISCBroker
ApplicationQuote Binder
TechnicalPrivilegedClaims
Considerations for Underwriting
Scheduling IP for coverage
Scheduling Products for coverage
Abatement / EnforcementDefense
Abatement / Enforcement
Abatement / Enforcement
Any protectable intellectual property:
Patents Trademarks Copyrights Trade Secrets
Abatement / Enforcement
Patents: Issued or Pending # if published or issued. Unpublished: Docket or serial # and copy
of filing
Abatement / Enforcement
Trademarks: registered, pending or common law
# if registered or pending. Identifying mark and scope of use if
common law (products / geography).
Abatement / Enforcement
Copyrights: registered or with rights pre-filing
# if registered. Registered or not, need information on the
work – samples, online, description, photo, design.
Abatement / Enforcement
Trade Secrets Uniform Trade Secrets Act protects:
information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons … and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Abatement / Enforcement
Trade Secrets – Scheduling
Defined as submitted or by reference, so underwriting can understand scope and protection.
May not need to reveal actual secrets Reference to recipe, formula or customer list
Abatement / Enforcement
Foreign Equivalents ? PCT’s ?
Abatement / Enforcement
Must Have:
Ownership, Right To Enforce or Protectable Interest. No “clouds on title.”
Abatement / Enforcement
Ownership Issues? Inventorship questions? Shop rights / ex-employers or ex-
employees?
Abatement / Enforcement
NOT YET INFRINGED / NO COMMERCIAL ACTIVITY
Objective test: Unauthorized INFRINGEMENT, or the
manufacture, use, sale, off er for sale or the development to the point of being ready for sale must first begin during the POLICY PERIOD or during a previous continuously insured POLICY PERIOD
Abatement / Enforcement
INSURE EARLY AND OFTEN
Patent applications as soon as filed
Abatement / Enforcement
WHO IS A GOOD CANDIDATE?
Valuable rights? % of actual or expected sales? Current licensing revenues?
Abatement / Enforcement
Best Candidates for Abatement:
Protecting advantage in market Lacks ready cash or credit to self-fund Recent experience with IP conflict Licensor to well-positioned licensee who may be tempted to breach
Abatement / Enforcement
Less Attractive Candidates for Abatement: Patent holding companies Business of finding existing infringers
inconsistent with pre-existing exclusion.
Defense
Defense
Scheduled Coverage Defined “Product”
Physical product Process Method of business Trademarks Product configuration / trade dress Websites – technical and content Software Media
Defense
Defining the “product”: Schematics Flow charts Submit actual sample
Defense
Defining the “product”:
Defined by insured’s own IP: As “disclosed and claimed” in patent Better to have specific claims than broad
application claims BUT: IP may not cover entire product to be sold
Defense
Collections of “products” Catalogs / .pdf’s
Defense
With opinion supplied
Non-infringement opinion with specific IP distinguished
Relying on invalidity arguments
Defense
Time on the market Long time – lower risk Emerging against well-established
industries: Insurable, but Higher risk
Defense
Source of products: Develop own products? Buy from others? Diligence?
Chance to network with attorneys.
Defense
Contract Requirements:
Defense
Offering as benefit to customers
INSURED THROUGH:
What are the applicant’s
concerns?
Specific known risk?
Most important terms: Price? SIR/Coinsurance? Exclusions?
Deal breakers?
Tell Underwriters Up Front:
On Market / Sales Independent developmentRisk management/clearanceContract requirementCompetitive pressuresInsurable Risk
CopyistInvalidity defenseExisting disputesBusiness Risk
Low techLow sales
Would Write
Would BuySellable
Write More Business
Insured
IPISCBroker